Friday, July 31, 2009

Money for nothing

Cash for Clunkers is out of money, and some politicians say the answer is to spend more.

I think the Mises Economics Blog has it exactly right:

let's just pause and reflect on these people who were surprised. Here is the amazing turn of events:

  1. The government starts handing out free money.
  2. People start grabbing it as fast as they can.
  3. The bureaucrats quickly realize that they are hitting the program's budget in mere days (of the program being finalized) and suspend the program.
What is the reaction to this perfectly foreseeable sequence of events? "...dealers were amazed...", "the explosively popular... program."

How do you get an economic recovery going? Start raining free money down on everyone's heads. I grew up thinking that the people from the Middle Ages were idiots... They believed the earth was flat! Turns out they didn't actually. But Rep. Miller (and how many Americans?) really does believe this nonsense. I have found the Dark Ages and it is us.
Economic ignorance is expensive and we’re paying the price.

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